Solana is slowly gaining traction after losing grip slightly during the macroeconomic headwinds and crypto winter of 2022. Messari data suggests that Solana’s market cap increased by over 118% QoQ, along with growth across NFTs and DeFi. Overall, the first quarter of 2023 has been relatively good for the blockchain platform.
Solana is Slowly Gaining Traction
During Q1 2023, multiple ecosystem developments fueled the transaction activities and fee payers. While just months ago, there were situations that sparked conversations about supposed insolvency. But Solana’s performance was stabilized after a few critical upgrades, like QUIC, a local fee market called priority fees, and Stake-Weighted Quality of Service (QOS).
Interestingly during the first three months of 2023, the layer one blockchain network witnessed considerable growth across multiple vertices like DeFi, GameFi, and NFTs. Messari reported that the Total Value Locked (TVL) in Solana increased by 23.5% Quarter over Quarter (QoQ). At press time, the TVL at Solana was $273.67 Million.
Moreover, the Liquid Staking Derivatives (LSDs) supported the Solana ecosystem. Marinade Finance, Jito, Lido, and JPool increased their TVL by 100% or more in a similar time frame. Also, these four LSDs managed to enter the top 20 list by TVL. While other protocols like Orca, Solend, and Raydium also increased their TVLs significantly as the broader market bounced back.
Solana’s NFT ecosystem also saw considerable growth, as revealed by Messari’s data. The total number of daily new NFTs jumped from 2.6 Million to 2.9 Million QoQ, a surge of nearly 12%. The sales volume of NFTs in the secondary markets dominated in terms of USD and gained almost 36%.
Also, in DeFi, the sales denominated in SOL increased by 20% before going through the roof. This movement suggests that asset price increases in USD did not purely accrue the “sales activity.” In the meantime, the unique buyers surpassed the unique sellers in Q1, 2023. The buyers’ count was 889,000, and the sellers were recorded to be 887,000.
Solana suffered a lot because of its exposure to the now-bankrupt crypto exchange FTX and Sam Bankman-Fried. The exchange invested heavily in nine projects of the blockchain company between December 2020 and March 2022. When the infamous exchange filed for bankruptcy, it started a contagion effect that affected everyone in contact. Also, many developers supposedly left the projects, sparking rumors of developer exodus.
Solana launched multiple applications this year, and as a result, their user base expanded. This trend helped stabilize and increase the active programs in its ecosystem. For instance, in Q1 2022, there were 58,000 unique active programs; in Q1 2023, this number increased to 96,000.
At press time, Solana (SOL) was trading at $23.19 with a slight drop of 0.34%; its value against Bitcoin gained 0.12% to 0.0007927BTC. Its market cap suffered by 0.25% to $9.11 Billion, and volume declined by 31.41% to $349 Million. Ranking at number 10, it enjoys a market dominance of 0.76%, with an ROI of 10,412.30%.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing